(Sample Materials) Economic Survey & Government’s Plan, Programme & Policies – “Housing”

(Sample Materials)
Economic Survey & Government’s Plan, Programme & Policies – “Housing”

Contents of the Chapter:

  • Introduction
  • Key statistics
  • Estimation of Urban Housing Shortage (201)
  • Govt. Policies for affordable housing
  • International Scenario
  • Indices related with housing Sector


The paradox of Indian economic growth manifests itself in
several ways. On one hand Urban India has high housing shortage, on the other
hand there is a massive and rapidly growing stock of vacant houses. In case we
adapt business as usual scenario, with no major change in the interventions
envisioned by public agencies, we may take trends in the growth in number of
households (HHs) and housing stock and consider the difference of the second
from the first as the shortage. This approach was adopted partially by the
Ministry of Housing & Urban Poverty Alleviation (HUPA).Interestingly, despite
the rapid growth in number of urban households, there will be no housing
shortage by the middle of Twelfth Plan period, as per this approach. This is
because the growth in the housing stock has been high in recent years, despite
the speculation of the bubble bursting all the time.

Housing shortage would not be a major problem if there is no
mismatch between the people for whom the houses are being built and those who
need them. It would, however, be unrealistic to assume that those living in
‘housing poverty’ would have affordability and access to the burgeoning supply
in the market. Within the urban population, there is a rapidly growing informal
sector whose ability to borrow from the formal market is not adequately
recognized. This is also posing a new challenge to the Policymakers and
financiers. Although there has been continued deepening and broadening of the
financial system, through a series of comprehensive financial reforms, the
outstanding housing loans account for only 7.25 per cent of India’s GDP, when
compared with China (12 per cent), Thailand (17 per cent), and Malaysia (29 per

India is a part of Global trend that is advancing towards an
increasing urbanization, according to which more than half of the world’s
population is living in towns and cities. According to Census 2011, India has a
total population of 1.21 billion out of which 31.1 % live in urban areas.
Therefore, the urgent need of the national policy makers, at present, is
authentic data on Housing viz, the housing stock, addition to housing stock,
investment in housing, housing conditions and needs (Structure, Congestion,
obsolesce) role of public and private sector in the housing, prices of building
materials etc. An idea about the size of shortage is essential so that the
interventions may be scaled up accordingly.

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About nineteen million (18.78 million) households grapple
with housing shortage in Urban India (2012) as per the estimate of the Technical
Group on Urban Housing Shortage (TG-12) (2012-17) constituted by NBO, M/o
Housing & Urban Poverty Alleviation. The estimate is based on Census & NSS 65th
Round results on Housing conditions and Urban Slums (July 2008-June 2009) with
usual inputs like obsolescence factor, congestion factor & homeless households.

The Congestion Factor

The ratio of households that are residing in unnaceptably
‘congested conditions’ from physical and socio cultural view point (viz married
couples sharing the room with other adults etc) was worked out using NSS results
– 65th round. The number of households requiring a separate dwelling unit on
account of congestion comes out to 14,986,312 (18.42 per cent congestion rate
from NSS was applied to the estimated population on 1.3. 2012 based on Census
2011 & inter census growth rate).

Homeless People

Census 2001 data of 0.8 million homeless people has been
assumed to remain constant during 2001-11. Considering that half of the homeless
are single migrants and the other half have average household size of three,
Technical Group calculated total housing requirement of 0.53 million (0.4
Million for single migrants and 0.13 for rest with average hh size of 3).


The figure for estimated housing shortage across the world
according to the internationally recommended standards, (PPD: people per
dwelling 3.5) is 428,700,000 units. However this figure is more than the double
if it is calculated using Dutch standards (PPD 2.4); 1,088,219,000 units.


  • By the year 2030, an additional 3 billion people, about
    40 percent of the world’s population, will need access to housing. This
    translates into a demand for 96,150 new affordable units every day and 4,000
    every hour. (UN-HABITAT: 2005).

  • One out of every three city dwellers – nearly a billion
    people – lives in a slum and that number is expected to double in the next
    25 years. (Slum indicators include: lack of water, lack of sanitation,
    overcrowding, non-durable structures and insecure tenure.) (UN-HABITAT:

  • As much as 70 percent of the urban housing stock in
    sub-Saharan Africa, 50 percent in South Asia, and 25 percent in Latin
    America and the Caribbean is of poor quality and not in compliance with
    local regulations. (Kissick, et al: 2006).

  • Access to land is fundamental to adequate shelter. Having
    legal title to that land encourages families to invest and improve their
    homes and allows them to access credit and other public services such as
    water and electricity. Nearly one sixth of the world’s population is living
    without secure tenure (UN-HABITAT: 2008).

  • The quality of housing stock & amenities directly affect
    health & quality of life One’s health is directly linked to housing and
    housing related basics such as water and sanitation. In Mexico, researchers
    at the World Bank and University of California, Berkeley, found that
    replacing dirt floors with concrete floors improved the health of children.

  • 2.6 billion people or 39 per cent of the world’s
    population live without access to improved sanitation and 751 million people
    share their sanitation facilities with other households or only use public
    facilities. (World Health Organization, 2009).

Gap in Housing Stock as per Census 2011: Eight Crore Census
houses have been added. Figures of houseless population and infirm structures
would also be required for making accurate estimation of housing shortage, more
so in view of increasing number of vacant houses owned by people who already
own/rent a house.

Quality of Housing

As per results of Census 2011, significant improvement in
quality of housing has been observed with increased proportion of population
moving away from katcha materials like thatch, grass , bamboo, mud etc. both for
walls and roof and decline in mud as material of floor.

Drinking water

Eighty Seven per cent of households use tap, tube well, hand
pump and covered well as source of drinking water including 32% households using
Tap water from treated sources. 47% of households have source of water within
the premises (R – 35%; U – 71%) whereas 36% of households have to fetch water
from a source located within 500 m in rural areas/100 m in urban areas.18% still
fetch drinking water from a source located more than 500 m away in rural areas
or 100 m in urban areas.


Use of electricity as main source of lighting has increased by11 pts to 67 %
(compared to 2001) whereas use of kerosene has declined by 12 pts accounting for
31 % of households in 2011.

Latrine Facility

Forty seven % of households have latrine facility (R-31%, U-81 %) including
36 % with water closet. There has been 11% decline in households having no


First National Housing Policy in India was formulated in
1988, followed by a new National Housing Policy in August 1994. Further, in
July, 1998 , another National Housing & Habitat Policy was announced with some
landmark initiatives like involvement of multi-stakeholders, repeal of Urban
Land Ceiling Act, permitting Foreign Direct Investment in housing and real
estate sector, etc.

However, all these policies were generic and applicable to
both rural and urban areas. Taking into account emerging challenges of required
shelter and growth of slums, the first ever urban areas specific National Urban
Housing and Habitat Policy, 2007 was announced in December 2007.

The National Urban Housing & Habitat Policy, 2007

The National Urban Housing & Habitat Policy, 2007 has sought to earmark land
for EWS/LIG groups in new housing projects for provision of affordable housing
for this segment of the population.

To prevent frauds in loan cases involving multiple lending
from different banks/HFCs on the same immovable property, the Government has
facilitated setting up of Central Electronic Registry under the SARFAESI Act,
2002. This Registry has become operational with effect from March 31, 2011.

The Jawaharlal Nehru National Urban Renewal Mission (JNNURM),

The Jawaharlal Nehru National Urban Renewal Mission (JNNURM),
was launched in December 2005 with aim to cover construction of 1.5 m houses for
urban poor during the Mission period (2005- 2012). It has two Sub-Missions :

Basic Services for the Urban Poor (BSUP) seeks to provide
seven entitlements/ services – security of tenure, affordable housing, water,
sanitation, health, education and social security in low income segments in the
65 Mission Cities.

The Integrated Housing and Slum Development Programme (IHSDP) seeks to
provide the above mentioned 7 entitlements, services in towns/cities other than
the Mission Cities.

The Indira Awas Yojana (IAY)

The Indira Awas Yojana (IAY) has been focused on the
provision of cash subsidy scheme to rural BPL families for construction of
dwelling units using their own design and technology. The funding under the
Scheme is provided by the Centre and State in the ratio of 75:25 respectively.
The Two Million Housing Programme, launched in 1998-99 is a loan based Scheme
and seeks to facilitate the construction of 20 lakh additional houses per annum
of which 7 lakh are targeted in urban areas and 13 lakh in rural areas.

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)
has sought to enhance affordability of the urban poor through the provision of
an interest subsidy of five per cent per annum on a loan amount of up to 1 lakh
for the economically weaker sections and lower income groups in the urban areas
for acquisition/construction of houses. The Government has also launched a
scheme of Affordable Housing in Partnership with an outlay of 5,000 crore for
construction of one million houses for EWS/LIG/MIG with at least 25 per cent for
EWS category. The Scheme aims at partnership between various agencies/
Government/parastatals/ Urban Local Bodies/ developers for realizing the goal of
affordable housing for all.

Rajiv Awas Yojna (RAY) aims

Rajiv Awas Yojna (RAY) aims to create a Mortgage Risk
Guarantee Fund to enable provision of credit to Economically Weaker Sections (EWS)
and LIG households and to encourage the States to adopt policies that will
create a slum free India on ‘whole City approach’.

Various Initiatives have been taken by State Governments also.

Housing Finance : Housing Finance Companies (specialized
institutions lending for housing) registered with the National Housing Bank are
a major component of the mortgage lending institutions in India. Commercial
Banks also play significant role in catering to the requirements of housing


House Startup Index (HSUI)

Housing Start indices are considered to be lead economic
indicators because these give an idea regarding the level of activities in a
number of sectors of the economy in immediate future and in this sense they are
forward-looking. The economic “ripple effect” of the housing activity, in the
Indian context, has been noted to be substantial. NBO in collaboration with RBI
is engaged in the operationalisation of the Housing Start-up Index (HSUI) HSUI
would be limited to new private and public built residential units in India,
whose construction is authorized through issuance of building permits. The data
on building permits issued for the new residential buildings in selected
cities/towns across the country on a quarterly basis constitutes basic input for
construction of HSUI. Initially, NBO, M/o HUPA has selected 50 cities/towns
across the country for generation of the Index. The coverage of HSUI will be
expanded gradually to include more cities. NBO, M/o HUPA has also developed a
web based HSUI MIS for online collection and compilation of data relating to
HSUI. Internationally, countries like Canada, UD, Japan, France, Australia & New
Zealand are compiling data related to building permits/ housing starts on
regular basis.

House Price Index

To track movement of prices in residential housing segment,
National Housing Bank (NHB) brings out Residentail Housing Price Index (NHB
Residex). Presently, NHB RESIDEX tracks the housing prices in the select 15
cities. It is proposed to cover 35 cities having million plus population. The
proposal is to expand NHB RESIDEX to 63 cities, which are covered under the
Jawaharlal Nehru National Urban Renewal Mission (JNNURM), to make it a truly
national index, in a phased manner. It is envisaged to develop a residential
property price index for select cities and subsequently an all India composite
index by suitably combining these city level indices to capture the relative
temporal change in the prices of houses at different levels.

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